homemarket Newsstocks NewsDelisting from bourses: History shows investors don't part with shares easily
market | Oct 13, 2020 3:30 PM IST

Delisting from bourses: History shows investors don't part with shares easily


Anil Agarwal ran out of luck to delist Vedanta from Indian bourses.

The initial months of the financial year 2021 (FY21) saw a slew of delisting offers announced by India Inc. Vedanta and Adani Power announced their delisting proposals in May while Hexaware and Allcargo made the announcements in June and August, respectively. While Adani Power and Allcagro’s delisting proposals are still awaiting shareholders' approval, here's a look at the other two - Hexaware and Vedanta.

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Baring PE could successfully delist Hexaware, but Anil Agarwal ran out of luck to delist Vedanta from Indian bourses.
Delisting Announcements in FY21
  • Vedanta – Announced on May 18
  • Hexaware – Announced on June 20
  • Adani Power – Announced on May 29
  • Allcargo Logistics – Announced on Aug 24
  • The successful delisting of Hexaware excited the Street as a lot of traders and investors built up positions in Vedanta in anticipation of quick bucks. However, that wasn’t the case as Vedanta failed to secure 90 percent of shares held by public investors for the delisting process to be successful.
    Hexaware Delisting
    • Reverse book-building opened on Sept 9 and closed on Sept 16
    • The floor price was at Rs 264.97/share
    • Discovered price of Rs 475/share accepted by Barings PE
    • More than 90 percent of shares got tendered, hence delisting was successful
    • Vedanta Delisting
      • Reverse book-building opened on Oct 5 and closed on Oct 9
      • The floor price was Rs 87.25 per share
      • Co failed to garner 90 percent shares required for delisting
      • LIC, the largest institutional shareholder, tendered shares at Rs 320/share
      • Delisting offer deemed failed
      • However, the larger point is while stock market participants get immediately excited about prospects of a quick buck as soon as delisting is announced, the recent history suggests more shareholders have lost money on failed delistings than gained on successful ones.
        Delistings – Historical Trends
        • Hexaware (Size - Rs 5,405 crore) – Successful
        • Vedanta – Failed
        • FY19-20
          • Linde India (Size - Rs 4,317 crore) – Failed
          • Ineos Styrolution (Size - Rs 1,842 crore) – Failed
          • FY18-19
            • Polaris Consulting (Size - Rs 1,268 crore) – Successful
            • Claris Life (Size - Rs 1,086 crore) – Successful
            • Infinite Computer Solutions (Size - Rs 400 crore) – Successful
            • FY15-16
              • Essar Oil (Size - Rs 3,744 crore) – Successful
              • Essar Ports (Size - Rs 1,427 crore) - Successful
              • Fulford India (Size - Rs 234 crore) – Successful
              • Xchanging Solutions (Size - Rs 303 crore) – Failed
              • Panasonic Appliance India (Size - Rs 96 crore) – Successful
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